Correlation Between Uniper SE and Monster Beverage

Can any of the company-specific risk be diversified away by investing in both Uniper SE and Monster Beverage at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Uniper SE and Monster Beverage into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Uniper SE and Monster Beverage Corp, you can compare the effects of market volatilities on Uniper SE and Monster Beverage and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Uniper SE with a short position of Monster Beverage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Uniper SE and Monster Beverage.

Diversification Opportunities for Uniper SE and Monster Beverage

-0.33

Correlation Coefficient

Uniper SE  Monster Beverage

Very good diversification

The 3 months correlation between Uniper and Monster is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Uniper SE and Monster Beverage Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Monster Beverage Corp and Uniper SE is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Uniper SE are associated (or correlated) with Monster Beverage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Monster Beverage Corp has no effect on the direction of Uniper SE i.e., Uniper SE and Monster Beverage go up and down completely randomly.

Pair Corralation between Uniper SE and Monster Beverage

Assuming the 90 days trading horizon Uniper SE is expected to generate 1.15 times more return on investment than Monster Beverage. However, Uniper SE is 1.15 times more volatile than Monster Beverage Corp. It trades about 0.04 of its potential returns per unit of risk. Monster Beverage Corp is currently generating about 0.0 per unit of risk. If you would invest  4,306  in Uniper SE on December 1, 2024 and sell it today you would earn a total of  147.00  from holding Uniper SE or generate 3.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

Uniper SE  vs.  Monster Beverage Corp

Uniper SE

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Uniper SE are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Uniper SE is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Monster Beverage Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Monster Beverage Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Monster Beverage is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Uniper SE and Monster Beverage

The main advantage of trading using opposite Uniper SE and Monster Beverage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Uniper SE position performs unexpectedly, Monster Beverage can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Monster Beverage will offset losses from the drop in Monster Beverage's long position.

The idea behind Uniper SE and Monster Beverage Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.